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This is where we will share insight and observations from our experience with clients and colleagues. We welcome your comments and input.

Deteriorating Customer Experiences

Have you noticed over the last several years that the quality of customer experiences for the most part have deteriorated in almost every aspect of business? Whether its B2B or B2C it seems like companies forgot what is critical for their long term success is the importance of a great customer experience. Now when I say customer experience many just think of customer service. Customer service occurs at that moment of time when an interaction takes place with a customer. However, that is but one piece of the customer experience puzzle and even if done well may not bode well for a business’s longevity. What I am talking about is a systematic and strategic process of focusing on the customer in every aspect of a company’s business. This is not just the customer service organization. It’s the financial organization, the legal organization, accounts payable and receivable, manufacturing, product development, IT, logistics and every functional group in the enterprise. From the top of the company to the person on the dock and everyone in between it’s a committed and understood part of a business that the customer experience is what it’s about and how the business succeeds. This concept is as much in line with B2B businesses as it is for B2C. Large or small it’s all about the customer experience that ensure business success and longevity.

In a previous blog my partner, Doug Morse, wrote about how a year ago Delta Airlines committed publically to spending millions of dollars in training customer facing agents to be more “customer friendly” as they put it. They assumed that their problem was that their employees who interacted with customers just did not have the right skills and training to insure the perfect customer experience. Now I have flown enough in my business life to know that there are good customer facing people and bad in many airline companies. But is the problem at this company poorly trained or grumpy people or is it deeper than that? Some people probably just have bad behavior and should just not be part of the team. On the other hand if people are not empowered to take care of customers to insure the best experience because policy and bureaucracy says its “financial stupid” not the customer that matters. This may work for a while but it will not last in my opinion. The issues are more deep seated around the entire strategy and leadership which in many companies don’t focus on a great customer experience. Training people to be nicer in the airline case was just dressing up the pig so to speak.

Why has the customer experience declined so much in the last few years? Why don’t businesses get the benefit that great customer experience yields? Why do they focus on the wrong things? The economic downturn surely has contributed in some respects to the situation. Business leaders have had to make major reductions in business expenses to maintain profitability and viability. At the same time for many years before the economic meltdown the desire for operational efficiency and business process re-engineering has been the focus of many businesses seeking to increase their profitability. Strategies that focused on products and services and possibly not on what the customers really need may have short term benefits but over the long haul do not guarantee business success. The combination of traditional strategic approaches and major thrusts at efficiency improvement may result in businesses losing sight of the need to insure that customers continue to have the best experience they can get for the money they spend.

Why is customer experience important and what does a positive experience yield? Although people have spent less in the last few years both at the B2B and B2C level they still have spent money on capital and consumer based goods and services. Leaders in customer experience would be expected to do better economically than laggards and get more share of wallet as a result. The Waterman Group’s research show companies that focus on customer experience have yielded better performance than those that do not. And in a down market like we have experienced, those that provide a better customer experience declined less and recovered quicker than those that did not. Waterman shows that from 2007 to 2011 Customer Experience Leaders performance went up more than 22% while Laggards declined more than 46%. The S&P 500 during this period was almost flat at minus 1.3%. In 2008 Leaders declined 32% while the Laggards went down 49%. The S&P was down 37%. Therefore those that adopted a leadership approach to Customer Experience clearly outperform those that do not.

OK, so what does it take to create a customer experience strategy in a business? Let’s start with what does Customer Experience mean? Customer Experience is a strategic framework that considers several key elements of the overall business structure and operations that focus on the customer. As I said previously people sometimes confuse Customer Service with Customer Experience. In many businesses this translates into trying to improve the operations of the customer service operations. Although this might be a necessity where customer service is performing poorly it alone cannot create a positive customer experience if the product/service offering does not meet customer needs or the billing processes are convoluted and confusing to customers or the product/service is delivered late on a regular basis. All of these are part of the customer experience equation. They must be performed at as high a level as the customer service to insure the best customer experience. Without including those in the strategy of the business will result in long term customer experience dissatisfaction.

So where do you start this process? The best approach is an assessment that can identify the key element areas of a business’s customer experience performance. Services Transformation and Innovation Group has created such an assessment that analyzes the following elements in a business:
1. Leadership Focus and Strategy
2. Organizational Alignment
3. Employee Engagement and Empowerment
4. Technology and Information Systems
5. Metrics and Customer Analytics
6. Customer Involvement/Engagement
7. Operations Focus

This high level assessment provides an overall index and individual customer experience element analysis that can assist a business in determining where a business has strengths and weaknesses in their customer experience strategic framework. Furthermore, the application of an in depth engagement with business leaders and their organizations provides a prioritized set of actions that begins the journey to develop a long term customer experienced organization.

What we have learned is that in order to build a business with a strong customer experience direction requires two things, a customer experience culture and a means to sustain it. Without the culture all efforts to build a long term customer experience organization will fail. This is why in my previous example of Delta airlines just investing in customer service improvements alone will not solve the issues fundamental to Delta with regard to its customers.

There are many examples of companies that build the customer experience into their businesses and they do it in many different ways. Southwest Airlines, Zappos and Zane’s Cycles are three examples of how this is done right. At least a few companies don’t seem to be deteriorating. Hopefully a few more will understand the benefit of focusing on the customer experience and insure that no more hair pulling occurs.

In my next blog we’ll talk about building the culture and sustaining it regarding customer experience.

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